This version is even worse than the house version. It adds about $140 billion in pork .
It's amazing how quickly the media has turned around and all coverage begins with the premise that the bailout should pass. Why? Because the stock market was a little turbulent? Big deal. Stocks go up and they go down. U.S. stocks trade at a 50% premium to other developed world stocks. Well guess what . . . the pixie dust is gone now and U.S. stocks will probably need to go down by 1/3.
Folks, the crisis is bad, but the "cure" is worse. It stems from a complete unwillingness to endure any pain whatsoever.
Remember, the government does not have any money to bail out anybody. They are borrowing it from future taxes or printing it and causing inflation.
I mean, if this was such a good idea, why didn't we do it before the crisis, just out of the blue - "hey, let's borrow money give it to the treasury department so they can start a hedge fund!" It doesn't make any sense.
Most importantly, NO ONE, even the authors of this travesty, NO ONE is saying that this bailout will actually work. Only that it "must pass" and "we must stabilize the market". When asked how they came up with the number $700 billion, they treasury officials said “It’s not based on any particular data point,” translation - "we pulled the number out of our @$$"
For every $50 billion the government has spent on bailouts, it has calmed the market for about 1 day, so I figure $700 billion will smooth things over for about 2 weeks. After that the government will double down to 1.4 trillion. There will be outrage and the dollar will start to buckle, but that will probably pass too. A month later, when they ask for 2.8 trillion, they dollar will collapse before it can even be voted on. The Dow will be at 6000 and gold will be 6000 an ounce.
Don't get excited about speculation opportunities, because it will be too late. There will be capital controls passed into law so that you cannot short stocks, export money, buy gold or other commodities. Expect price controls and rationing.
The bailout is a stalling tactic, so that the big shots can get out of their stock positions and out of the dollar before they clamp down and force you to go down with the ship.